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Trend Following - A Complete Guide

  • #81
  • Dec 28, 2010 5:58pm Dec 28, 2010 5:58pm
Brenzaj

is it just the cross type that matters? or are you interested in the price bars and, pivots, market structure etc?

ie., could you trade the crosses only, without even seeing the price bars?

thanks


Quoting brenzaj42
As far as the crosses go, I could post charts all day but try this. Set up every daily chart that you have with 5/12 ema crosses. Now, make the candles or lines(whatever you use) the same color as the background so you cannot see them. Only the 5/12 ema should be visible. Now you tell me which crosses have the angle and separation to trade. Once you have an eye for it, it becomes second nature.

Hope that helps.
  • #82
  • Dec 29, 2010 6:11am Dec 29, 2010 6:11am
I never move the stop or use a trailing stop.


Quoting calbracht
Hi Brenzaj,

Once you are in a trade with an initial SL of 100 pips, do you even trail a SL? From your last reply it seems you don't, but that you exit on the next cross. If so, once your trade takes off, you won't be getting stopped out on whipsaws too often. Do you ever bring that initial stop to BE? If so, when?

Thanks,
C.
  • #83
  • Dec 29, 2010 6:13am Dec 29, 2010 6:13am
I do not trade with invisible bars, that was just an exercise I use to teach a person's eyes to recognize good fresh crosses. I do not pay attention to too much else though except parallel and inverse analysis.

Quoting Jungles
Brenzaj

is it just the cross type that matters? or are you interested in the price bars and, pivots, market structure etc?

ie., could you trade the crosses only, without even seeing the price bars?

thanks
  • #84
  • Dec 29, 2010 12:38pm Dec 29, 2010 12:38pm
Hi Brenzaj42,

Thanks for answering all the questions posed. I have been reading more info on Parallel & Inverse analysis and came across a site that specializes in using P & I analysis, along with some kind of strength allert for about $20.00 per month. Do you think it would be worth using such a service? If you have a specific site or group you use/recommend please let me know.

Also, when there is a good 5/12 ema cross, at what point do you enter the trade? After the close of the bar at the cross, one bar later, etc. Some of those crossing bars are very big, so I wondered if you try to wait for a pull back on those?

Thanks again,
C.
  • #85
  • Dec 29, 2010 6:38pm Dec 29, 2010 6:38pm
I do not know what group you are referring to but it is easy to do on your own. After a good cross I will enter the trade as soon as it goes my way. Basically in the Asian Session or the Main Session. If neither, I will reevaluate the next night.




Quoting calbracht
Hi Brenzaj42,

Thanks for answering all the questions posed. I have been reading more info on Parallel & Inverse analysis and came across a site that specializes in using P & I analysis, along with some kind of strength allert for about $20.00 per month. Do you think it would be worth using such a service? If you have a specific site or group you use/recommend please let me know.

Also, when there is a good 5/12 ema cross, at what point do you enter the trade? After the close of the bar at the cross, one bar later, etc. Some of those crossing...
  • #86
  • Dec 29, 2010 8:53pm Dec 29, 2010 8:53pm
Hi, another recuite(sp) for the thread.
Like the idea of the 5/12 cross, real easy.

Lots of talk about large numbers of pairs to be watched. Is there a recommended list available? ... or is there a warning of what to keep away from?

Looking forward to the return of the Micardo although brenzaj42 is keeping us active.
  • #87
  • Dec 29, 2010 8:55pm Dec 29, 2010 8:55pm
Brenzaj42,

I'm glad you joined this thread and have been willing to bring your knowledge to this group. I really appreciate what you have explained about how you trade. I'm looking forward to putting these things to work in the very near future trading the daily charts. I'll try not to be as much of a pest from now on! Thanks for graciously responding, as you have.

Happy New Year to you.

C.
  • #88
  • Dec 30, 2010 3:35am Dec 30, 2010 3:35am
I trade just about everything my broker offers. A trend is a trend.



Quoting Phreddy
Hi, another recuite(sp) for the thread.
Like the idea of the 5/12 cross, real easy.

Lots of talk about large numbers of pairs to be watched. Is there a recommended list available? ... or is there a warning of what to keep away from?

Looking forward to the return of the Micardo although brenzaj42 is keeping us active.
  • #89
  • Dec 30, 2010 4:16am Dec 30, 2010 4:16am
Quoting brenzaj42
I trade just about everything my broker offers. A trend is a trend.
Hi

Does AUD/NZD qualify for short in accordance with your rules, are you short?
Regards
  • #90
  • Dec 30, 2010 4:35am Dec 30, 2010 4:35am
Quoting brenzaj42
I trade just about everything my broker offers. A trend is a trend.
Ah! the voice of experience.

OK then, same question but for a beginner.

I cannot see myself putting the whole lot onto a profile and going through them each day. Too confusing.

Hitting the 'new chart' button I get 6 pair offered;
next there is the majors - 5 offered but four are from the first list;
then minors another 8;
lastly the exotics - 13.

As I am writing this I am thinking that maybe I should make a profile of the first six plus the odd one from the majors.
A second of the minors and leave the exotics until I get more experience.

I should add that the inexperience is with the daily TF and multiple pairs. My forte is London Breakout on £$. I just want to 'breakout' to the daily.
  • #91
  • Dec 30, 2010 6:50am Dec 30, 2010 6:50am
Yes and No, I like to trade in the direction of the weekly which is currently in an oscilating uptrend so I would normally wait for it to stall and go back up to jump on. However, you can always play the retracements if you like. You just have to realize it is riskier but the setup itself is what you are looking for. Again, I love fresh crosses in the direction of the weekly chart.



Quoting howard
Hi

Does AUD/NZD qualify for short in accordance with your rules, are you short?
  • #92
  • Dec 30, 2010 6:55am Dec 30, 2010 6:55am
You do not have to trade a bunch of pairs. I just like to have the option because pairs do not trend all together at the same time that often so I can usually at least find something with scanning more pairs. It really is not that confusing once you get in a rythym. You scan the pairs every night for 20 minutes so I get to a point where I almost have the charts memorized. It is freaky but you almost know what is probable before you get to the computer simply because you get into a groove, at least I do.



Quoting Phreddy
Ah! the voice of experience.

OK then, same question but for a beginner.

I cannot see myself putting the whole lot onto a profile and going through them each day. Too confusing.

Hitting the 'new chart' button I get 6 pair offered;
next there is the majors - 5 offered but four are from the first list;
then minors another 8;
lastly the exotics - 13.

As I am writing this I am thinking that maybe I should make a profile of the first six plus the odd one from the majors.
A second of the minors and leave the exotics until I get more...
  • #93
  • Dec 30, 2010 8:05am Dec 30, 2010 8:05am
Newbies should be very cautious trading numerous pairs with any trading method. Take a couple or few pairs and really get to know them first. I have been trading for about 27 months and I only trade the majors. There are plenty of trends to get in on. You need to be able to identify the pullbacks within the trend so you can jump in at the right time.
  • #94
  • Dec 30, 2010 10:36am Dec 30, 2010 10:36am
Hi Everyone,

Just a quick one on multiple pairs. I think brenzaj42 said it best when he said that a trend was a trend. Ultimately it doesn't matter what you are trading, if it moves and provides you with high probability set ups then you can trade it.

I would get to worried about which or how many pairs you watch, as long as you are picking the right setups.

I watch nearly 30 pairs on a few different timeframes, and it takes me a very short amount of time to scan through all of them and note which ones look good and which ones could take some time to set up.

The important thing is to trade trending markets. As long as markets are trending, there will be setups to trade.

In the new year, when I get back to work I will be posting all of my charts etc, to help you guys find your way through this jungle.

If you have any other questions please feel free to ask.

Thanks
  • #95
  • Dec 30, 2010 1:45pm Dec 30, 2010 1:45pm
Not to dwell but I strongly believe caution is in order for new traders. Having been there and had 20+ pairs on my screens I can attest to that being overwhelming especially when there are many set-ups occurring simultaneously and your trying to make a decision on pulling the trigger/s. Those who have been trading several or more years I'm sure can understand.

Having said that I am enjoying this thread and look foward to Micardo's further thoughts and charts. Happy New Year to everyone.
  • #96
  • Dec 30, 2010 2:02pm Dec 30, 2010 2:02pm
Quoting Winston Reed
Not to dwell but I strongly believe caution is in order for new traders. Having been there and had 20+ pairs on my screens I can attest to that being overwhelming especially when there are many set-ups occurring simultaneously and your trying to make a decision on pulling the trigger/s. Those who have been trading several or more years I'm sure can understand.

Having said that I am enjoying this thread and look foward to Micardo's further thoughts and charts. Happy New Year to everyone.
Start with a small group that *you* are comfortable handling and when you are more "efficient" in trade selection then add more...

No need to start with 30+ at all....

But when you become efficient and you know *exactly* what to look for it is done within seconds... that is why 30+ are used, or whatever... 20, 25, 50...

the point is that with time and experience you can add more markets, even outside of Fx. And then you become "awkard", cherry picking the best...

my 2 cents.
  • #97
  • Dec 30, 2010 3:50pm Dec 30, 2010 3:50pm
Quoting Pipalicious
No need to start with 30+ at all....
FWIW, I agree.

Start with four charts - the Majors. That way you can see the USD component.

Then, out of those, if you see a pair that's particularly strong/weak against
the USD you can just trade it. Using PA or Indies, as you prefer, to get you in and out. This alone will help you make better trades and help you to start seeing how to trade markets - not indies or chasing prices around.

After that, looking at how the currencies are faring against each other will make more sense to you.
  • #98
  • Dec 30, 2010 7:01pm Dec 30, 2010 7:01pm
Quoting brenzaj42
First off, I do not use fibonacci. When you are using parallel and inverse analysis, you are trying to gauge the strength or weakness of BOTH sides of the pair. Lets say you want to short GBP/USD. I will use parallel analysis to determine how weak GBP pairs are where GBP is on the left and inverse to analyse GBP where GBP is on the right(basically EUR/GBP). I then do the same for the USD side. A trend in the forex market is something making higher highs and higher lows, yes but this market is unique in the regards that it is also a currency pair...
Hello brenzaj42, thanks for great contribution you are making to this thread. I have a problem of over analysing things. The problem I have is analysing strength or weakness of both sides of the pair.

Here is my problem:

I analyse a pair's strength or weakness based on pips to open (i.e. I use my broker new daily candle and how many + or - pips to open it has moved for the day).

Say for example all gbp pairs moved around +30 to 80 pips to open. That shows us the sign gbp is stronger. I'm looking at this at the start of london open as I live in UK. My immediate reaction is always gbp is stronger in asian session. But then most of the time on london session it goes into consolidation and then reverses in london/US session and ends -30 to 80 pips to open or continues to get stronger.

So a pair strength or weakness changes from session to session. i.e. In asian session it is stronger but in US session it may get weaker.

How do you determine the strength or weakness when it can easily fluctuate in any given day within a session? Do you look at overall trend and analyse whether it is retracing or continuing trend?

Analysing strength or weakness of pairs is keeping me out of my trade. I look at pair strength or weakness in london open and when I see price already moved great deal in asian session (i.e. gbp +80 pips to open) then I think it could retrace now or consolidate or continue. I wait for confirmation and by the time I get the confirmation the move has already happened and it leaves me late into the trade or gives me excuse not to trade.

How do we deal with this. Could you tell how do you decide today gbp is stronger or weaker and how does it influence your trade entry or exits please?

I'm sorry for long post.
  • #99
  • Dec 30, 2010 7:19pm Dec 30, 2010 7:19pm
Just a quick 'thank you' to all the people who responded to my post asking for 'how many pairs'.

To put the wrong impression straight, I am not proposing to trade multiple pairs, simply to watch them before deciding with which to go.

I will practice over the next week and maybe post a few charts while we are in the holiday period. I will not be clogging the thread so much when The Micardo returns.
  • #100
  • Edited 8:09pm Dec 30, 2010 8:07pm | Edited 8:09pm
When I conduct parallel and inverse analysis, I am simply pulling up daily charts of related currency to see what they look like. For example, if I am planning on shorting EUR/USD pair, I will flip to multiple EUR daily charts to see if they are all in downtrends as well and if they are all up against resistance or have room to move. I will then check the daily charts for USD pairs to see if the USD is on the strong side of the trends. That is it. I will then enter either in Asia or most likely the Main session. Of course, a currency changes from session to session but we are trading a strong trend so odds are right off the bat that it will go in our direction in at least the next session or two. If you have read how I trade, I just look for fresh crosses with good angle and separation that are in the direction of the weekly chart. Again, I just look for that on other pairs when conduction parallel and inverse analysis. You may be over complicating things, at least that is how it sounds to me. I just try to keep things as simple as possible. I hope that helps, if not let me know.



Quoting vijidas
Hello brenzaj42, thanks for great contribution you are making to this thread. I have a problem of over analysing things. The problem I have is analysing strength or weakness of both sides of the pair.

Here is my problem:

I analyse a pair's strength or weakness based on pips to open (i.e. I use my broker new daily candle and how many + or - pips to open it has moved for the day).

Say for example all gbp pairs moved around +30 to 80 pips to open. That shows us the sign gbp is stronger. I'm looking at this at the start of london open as I...
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